Private Sector Defies Coronavirus Hit to Spend Sh 52 Billion on Advertisements

Businesses in Kenya defied the economic slowdown caused by the Covid-19 pandemic, spending a whooping Ksh 52 Billion on advertising for the first five months of 2020 (January to May)

This is according to a report released by Reelanalytics, a marketing and media intelligence agency on the impact of Covid-19 on advertising.

The report shows that the expenditure on advertising rose by Ksh 1 billion to KSh 52 billion from KSh 51 billion over the same period in 2019.

The rise was driven by the government and the private sector coming together to put out advertisements using the mainstream media platforms in Kenya, a total that added up to the KSh 52 billion majorly driven by awareness campaigns against Covid-19.

Reelanalytics clarified that the total figure was calculated for research purposes only, as The Media Owners Association (MOA) does not charge the government for the COVID-19 awareness campaigns, and also included in-house advertisements by the media houses.

Enock Mokaya, Reelanalytics Senior Researcher said that the social industry that has been unpredictable over the years is one of the most utilized media from March to May caused by the shift in advertising strategy to educate more people on how to curb the spread coronavirus.

In 2019, Betting Firms dominated the advisement space both in broadcast media (TV and Radio), Print as well as Social Media. Reelanalytics reported that betting firms accounted for 19% of advertisement revenue to media houses.

This year’s top five spenders on advertising were; Corona Virus Awareness, Safaricom Skiza Tunes, Viusasa, Government of Kenya Kazi Kwanza, Kenya Commercial Bank (KCB) and Ministry of Health Komesha Corona Campaign.

Safaricom continues to be the leading individual company in advertising, spending Sh6.7 billion between January and May, 2020, owing to its diverse customer base as well as products campaign in turn push the service provider to become the highest spender in adverts to media houses.

Royal Media Services emerged second with a total expenditure of KSh3.3 billion, Standard Group and KCB tied at third with both spending Ksh 1.9 billion while betting firm, Lotto was fifth, spending a total of KSh1.7 billion.

When it comes to messages to do with Covid-19 awareness, The Ministry of Health led the way with a total spend of Ksh 1.9 billion over a period of five months.

The television sector received most of the ad revenues amounting to Sh31 billion, recording an increase of KSh 7 billion from the revenue over the same period in 2019 that amounted to KSh 24 billion.

Meanwhile, radio attracted adverts valued at Sh20 billion, with the volume of adverts being higher compared to TV during the period under review attributed to the affordability of placing ads on the radio.

Print stood at third and had the lowest advertising revenue valued at KSh1 billion.

Consequently, the media industry emerged as the top advertisement spenders in 2020 at 15% followed by the communication industry 14%.

In third and fourth places was finance and betting firms standing at 13 percent and 11% respectively, whereas firms in household and personal care segments accounted for a combined 9% share.

Tied at number five were the beverage industry, Agriculture and government departments at four percent each.

Outdoor advertising was also high, with Magnate Ventures registering the highest number of outdoor ad sites, followed by East African Breweries (EABL) and Coca-Cola.

Elsewhere, Reelanalytics noted that advertising expenditure by corporates registered a record drop amounting to KSh 9 billion, a 77.34% drop.

Manufacturing and hospitality industries were the hardest hit by the COVID-19 pandemic recording little to no advertising activity over January to May review period.

The expenditure on advertisements is projected to rise to over KSh140 billion in rate card value in 2020